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CIO - On February 14, 142 million Valentine's Day cards will be exchanged, not even counting packaged kids' valentines. It's the second-biggest holiday for greeting cards (Christmas is the biggest), and a critical time for Hallmark, which creates lines of cards, gifts and other products each season.
At any one time, the $4 billion company has 100,000 active SKUs going to 40,000 retailers. The goal is to crank out brand-new and innovative products throughout the year while getting it all to customers in time for pre-holiday shopping. "You don't manage that on a spreadsheet," says Hallmark CIO Mike Goodwin.
Until recently, the ability of Hallmark's consumer products group to govern issues like capacity planning, productivity and portfolio management was limited, says Goodwin. Three years ago, the group adopted the Planview portfolio-management tool that IT had been using to manage its own projects for more than a decade.
"We took the rigor and discipline we've applied for years in the IT organization and applied that to product development to create more predictable outcomes," he says.
Using portfolio management--a tried-and-true IT concept--for new-product development helps companies bring discipline, control and transparency to product lifecycle planning and investment, says Daniel Stang, a research director at Gartner. "The topic is red-hot, as many [consumer] product companies see a competitive advantage to using portfolio management [this way]," Goodwin says.
Early Warning Signs
Hallmark can identify products with the longest lead times and plan backward from there. A real-time view into product development gives early warnings about resource bottlenecks that could delay launches.
For example, if Hallmark is simultaneously developing four techno-plush toys and a line of embedded-sound greeting cards, the new system allows the company to better manage the shared staff involved--from writers and illustrators to electrical engineers and product designers.
"We don't have infinite resources," Goodwin says. "There's always a tension between the products we want to launch for the season and what we can practically deliver."
Hallmark starts with a wide array of ideas. As data is collected on the costs and resources required, as well as on the potential value to customers, the staff narrows the field. For Blooming Expressions, a fabric flower that blooms to reveal a message for a special person, for instance, the staff came up with product design, messages and technology. Then they could see what it would take to make the product at scale and compare that to predicted market demand for it.
The portfolio management system has required Hallmark's creative types to adapt. For example, they weren't accustomed to entering their precise project hours into a system. "They might estimate it," says Goodwin. "In IT, we enter it exactly. To get the benefit [from the software], you have to collect the data." They also needed training not only in how to use the tool and its analytics modules, but also in how to create new work processes.